Yesterday in Crypto - Issue #22

Read time: ~7 minutes

Coinbase, one of the largest crypto exchanges, is spreading its wings and heading to Canada. Starting out in the U.S., they've now set their sights on global horizons. To make a splash, they're even offering a month-long free trial of their new service, Coinbase One.

But here's the thing: this Canadian adventure is just the tip of the iceberg. While they've had their fair share of hurdles back home in the U.S., Coinbase isn't one to sit still. They recently rolled out Base, a fancy new tech thing on the Ethereum network, showing they're all about pushing boundaries and staying ahead of the game.

You can read more about the Coinbase Master Plan HERE.

So, what's the big takeaway? Well, as Coinbase keeps growing and diving into new territories, it's becoming pretty clear they're a force to be reckoned with. Their stock is one of the few ways to gain exposure to the crypto industry without actually buying crypto. As they are still in the early stages of their Master Plan, I feel they are undervalued.

DISCLOSURE - I own Coinbase stock.

Javier Milei, a pro-Bitcoin libertarian candidate, has made a surprising victory in Argentina's primary presidential election. Milei, who is part of the "La Libertad Avanza" (Freedom Advances) party, secured 30.5% of the votes, outpacing his competitors from the "Juntos por el Cambio" (Together for Change) and "Unidos por la Patria" (United for the Homeland) parties, who garnered 28% and 27%, respectively. This result was unexpected, as pre-election polls had predicted Milei would not rank higher than third place.

Milei's political stance is notably critical of central banks, which he describes as mechanisms that allow politicians to deceive citizens through inflationary measures. He has praised Bitcoin, emphasizing its significance as a return of monetary power to the private sector.

Given the current voting dynamics, it's unlikely any candidate will secure more than 45% of the total votes. This means a general election will take place in October, featuring the top candidate from each party. If no candidate achieves a 45% majority in that round, a final runoff election will be held in November. This development in Argentina's political scene highlights the fact that as more countries struggle with inflation (Argentina’s interest rates are over 100%. Yes, 100%), citizens will turn towards crypto and Bitcoin - in their lives, and at the polls.

Michael Burry, famously known for his significant bet against the mid-2000s housing bubble as depicted in the movie "The Big Short," has made some notable moves in the stock market recently. According to recent reports, Burry has placed large bearish bets against two major index funds, the S&P 500 and Nasdaq-100. This move indicates his anticipation of a potential downturn in these markets.

In addition to these bearish positions, Burry has made several changes to his stock portfolio. He sold off his stakes in well-known companies like Alibaba, First Republic, PacWest Bancorp, Wells Fargo, and Western Alliance. Instead, he shifted his focus towards sectors like mining, shipping, and energy, adding companies such as Crescent Energy, Comstock Resources, Precision Drilling, Star Bulk Carriers, and Stellantis to his portfolio. Interestingly, only a few positions remained unchanged during this period, including investments in The Geo Group, Liberty Latin America, New York Community Bancorp, Signet Jewelers, Cigna Group, and The RealReal.

The problem with the stories you’ll see about this in the media is two-fold:1. It is stated that Burry shorted the market with 1.6B. However, Burry did this with options. 1.6B is the notional value of the options - not what he paid to open the position. He appears to be simply hedging his long positions. We have no idea what premium he paid on these options.2. This information, although disclosed yesterday, is old. He made these moves sometime between April and July - last quarter. We don’t know if anything has changed since then, as it’s already halfway through August.Be cautious - when you see stories like this, think about why the media would position things the way they do. Why would most stories leave out the details mentioned above? Might they want you to be fearful? Might they want you to follow along and short the market at the wrong time?

The wise investor does the opposite of everyone else. Does this news mean we’re in for a bullish period? Maybe. If not, we’ll soon be watching Christian Bale again as Michael Burry in “The Big Short II.”

That’s all for today. We’ll see you tomorrow.

“Be fearful when others are greedy. Be greedy when others are fearful.”

– Warren Buffett, Investor